26 November 2002

SME’s participation in SME’s participation in EU sponsored projectsEU sponsored projects

Tomasz CioskaTomasz Cioska

26 November 2002

OutlineOutline

PLAZMATRONIKA’s access to the Fifth Framework Programme for Cooperative Research GROWTH project on utilisation of asbestos residues as an example of opportunities and problems for Polish SME’s related to the participation in EU sponsored projects

26 November 2002

SAFE project - SAFE project - characteristics characteristics • Project acronym: SAFE• Purpose: development of safe techniques for asbestos abatement and

elimination works (waste treatment and elimination)• Partners: INERTEC (coordinator), SOLDATA, BBRI (Belgium Building

Research Institute), CMS, SMH, Plazmatronika, InVerTec, RWTH• Plazmatronika’s task: development of the pre-industrial microwave

cavity • Contract signing date: 14 June 2001• Kick-off meeting date: 9 July 2001• Estimated eligible costs: 2,854,815 € • Maximum community contribution: 1,747,663 €• Plazmatronika’s share: 245,841 €, 50% EU’s participation: 122,920 €• Timing: 36 months

26 November 2002

OpportunitiesOpportunities• Gaining intercultural experience through

cooperation with European partners and institutions • Practical preparation for every day work in EU

business and institutional environment before formal access of Poland to EU

• Organisational experience – EU-imposed formal project management rules– strict internal accounting and controlling procedures

• Additional funding for technology development• Opening European markets for SME’s products

through cooperation with EU partners

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Possible difficultiesPossible difficulties• Lack of adequate cooperation with Polish

authorities and institutions• Unfavourable climate for Polish hi-tech

companies in Polish scientific circles• Complexity of EU procedures• Strict project management and accounting

requirements imposed• Difficult communication with European

partners (cultural differences)• R&D Companies’ subordinate position in

structuring projects

26 November 2002

Filing procedureFiling procedure• The complexity of procedure making the

filing of applications and reporting an art in itself– Necessity to train in house staff

• scarcity of resources in SMEs• lack of appropriate coaching

– Lack of qualified institutions providing overall assistance to SMEs interested in taking part in a EU sponsored projects

• Long-lasting process (1.5 years)

26 November 2002

Filing procedure ctd.Filing procedure ctd.

• Lack of information on the advance of the procedure

• Binding terms imposed only upon the applicants, not the EU authorities

• One sided contract with EU (joint and several liability of partners)

• Incoherence of project and general accounting rules

26 November 2002

Project ManagementProject Management

• Necessity to introduce strict internal accounting and controlling procedures for project settlement purposes only may be too costly and burdensome for SMEs

• Lack of flexibility in changing the allocation of funds and changing project execution schedules troublesome in case of elaborating prototype technologies, which, by definition are, unpredictable

26 November 2002

PartnersPartners• Difficulty in obtaining equal financing conditions with Western

partners for Polish SMEs• Unequal financial standing of Polish SMEs and Western

partners• Business culture differences• Unwillingness to specify the principles of future use of

technologies developed in the consortium agreement • Polish R&D Companies’ subordinate position in a project

– Low manmonths– Inadequate infrastructure – High participation costs vs. uncertain outcome

26 November 2002

Polish taxes and lawPolish taxes and law• Unstable tax and legal environment in Poland making

difficult the planning of expenditure several years in advance• The scope of the problem:

– VAT (22%)– CIT (28%)– PIT (19%-40%)– Social Security (19%)

• Unclear and changing situation as to the tax status of EU funding– frequent changes of official interpretations – known cases of retroactive payment of taxes by beneficiaries of

EU funding

26 November 2002

Thank you for your Thank you for your attention!attention!